Ethereum (ETH) reaches new all-time high levels: Should you buy ETH now?

By: Ilija Rankovic
Ilija Rankovic
Ilija is a trader, analyst, writer and consultant with a prolific experience in the finance industry. He focuses on… read more.
on Feb 3, 2021
  • Ethereum's price reaches new all-time highs as fundamentals flourish.
  • DeFi growth, on-chain activity, and ETH call options are the main reasons for the current ETH price.
  • ETH needs to close above the $1,440 level in order to stay bullish in the short-term.

The price of Ethereum (ETH) managed to pass the $1,570 mark, reaching its new all-time high late Tuesday. What’s next for Ethereum and should you buy ETH now?

Fundamental analysis: an enormous amount of call options and massive DeFi growth push ETH up

The second-largest cryptocurrency by market capitalization reached new all-time highs in the past 24 hours. The reason for the push was mostly its booming fundamentals, rather than technical factors. On-chain activity, DeFi sector growth, as well as the optimism coming from the ETH options market, contributed to the push past $1,500.

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Analysts at Laevitas, a data analytics firm, posted a statement where they said that 80% of Deribit’s ETH volume consisted of options market calls. This metric is suggesting that the buyers are rushing into the market, causing the spot market price to rise as well.

Taking a look at the weekly performance, ETH managed to post gains of 23.58% when compared to its position a week ago. This price gain outperformed BTC’s gain of 19.30% over the same period. At the time of writing, ETH is trading for $1,546, representing a 35.31% gain compared to last month. The second-largest cryptocurrency by market cap’s current market value sits at $175.37 billion.

ETH/USD technical analysis: Ether continues its move up on slowly descending volume

Taking a look at the daily chart, we can see Ether’s break from the sideways trading period, which many analysts labelled as an ascending triangle formation (21 January until 1 February). The cryptocurrency’s price responded firmly to the 21-day exponential moving average, and kept creating higher lows while maintaining its highs at the same level. This technical formation, alongside the descending volume, is not typically a bullish indicator. However, Ethereum’s fundamentals managed to prevail and ETH pushed higher to the new all-time high of 1,574.

ETH/USD daily chart
ETH/USD daily chart

Ethereum’s daily RSI indicator is slowly moving towards the overbought territory, with its current value sitting at 65.97.

ETH/USD 1-hour chart
ETH/USD 1-hour chart

Zooming in to the hourly timeframe, we can see Ether’s price increase as well as a volume spike when the cryptocurrency started contesting the $1,440 mark. Ether has passed the $1,440 as well as the $1,477.3 levels without much trouble as a part of the initial push. The cryptocurrency then continued its move up in a slower fashion and on lower volume, ultimately reaching an all-time high of $1,574.

With the volume on the hourly and daily chart fading, we can expect either a slight pullback or sideways coming from Ethereum unless a new wave of buyers steps in. ETH needs to keep itself above the 21-hour EMA to keep reentering price discovery mode an option. However, if we take the daily chart into consideration as well, ETH needs to close the current daily candle above $1,440 in order to stay bullish.

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